I have some important news to share with you. Last week, the work group I appointed to study wages and insurance benefits of the employees of outside service contractors completed their analysis of the local market and presented their findings to me.

Their conclusions were that some of our outside service contractors were paying hourly wages that were below market, that service contractors were having difficulty recruiting and retaining qualified employees due to low entry wages and minimal annual increases, and that some of the service contractors did not offer low-cost health insurance.

The work groups findings made it clear that the University needed to take immediate steps to address wages and health insurance for hourly employees working for our outside service contractors.

I am pleased to report that, effective last Thursday, the University adopted and implemented a new policy that sets minimum standards for service contractors doing business on the Universitys campuses. The primary components of the new policy are as follow:

Effective immediately, the minimum hourly wage for all employees of outside service contractors is $8.00 per hour. Housekeepers, who previously had a starting hourly wage of $6.40, now have a minimum starting hourly wage of $8.55. Groundskeepers, who previously had a starting hourly wage of $6.40, now have a minimum starting hourly wage of $9.30.

University service contractors are expected to recognize performance and length of service in their pay scales. Many current hourly employees are seeing additional increases that put their pay above the new minimums, based on their total years of service. The University will review wage rates annually and update the minimum standards of the policy consistent with changes in market conditions.

All service contractors are expected to offer health insurance to all of their employees, keeping monthly premiums low in order to encourage high participation by the employees. Contractors are expected to implement the health insurance within a month, which allows a reasonable time to negotiate physician contracts and conduct enrollment activities.

We are very satisfied that this new University program establishes a wage and benefit level that is near the top of the market. The new policy is already in effect, and hourly contract employees are now receiving increased wages. Most hourly contract employees received their pay increases in their paychecks yesterday, and the rest will receive their increases in paychecks this week  all retroactive to last Thursday.

I requested this study as a response to the outpouring of sentiment from our community  students, faculty, staff, alumni, trustees, donors, and the clergy. We adopted the new policy because the data and analysis clearly indicated a change was in order, but more importantly, it was the right thing to do. Universities should always lead the way, and providing fair wages and health insurance is a necessity.

It is also important to point out that the Universitys position on the labor dispute has not changed. The University remains neutral and is not a party to those discussions. That is an issue to be decided between UNICCO, its employees, and the union.

Finally, I want to assure you that there will be no increase in tuition next year to cover the cost of this new program. Tuition is already high, and we intend to honor all published rates for the next academic year.

I appreciate your input on this issue during the past few weeks. And I know that you support our decision to provide increased wages and health insurance for the hourly employees of our service contractors. I wish I could assure you that the next few months will be quiet, as the union, service contract workers, and their employer engage in a debate over representation. We need to respect the process. Democracy is messy.

Best wishes,

Donna E. Shalala President

It’s good to have something official, although I’d still like to see the whole text of the actual report.

I think we have to give UM credit here. UM may be a little late to the party (the faculty agitation on this issue started at least in 2001), but they’ve done some good things, and for that we should be happy and grateful. That doesn’t mean there isn’t some fine print to be worried about. The two chief items which jump off the page are the issue of how much “health insurance … [with] monthly premiums low in order to encourage high participation by the employees” will actually cost or what it will offer. The reality — which is no fault of UM’s or for that matter UNICCO’s — is that decent health insurance is increasingly expensive, and might even cost as much or more than some of these raises.

The even bigger problem, of course, is that if you view this move in context, it’s impossible to deny that the only reason this happened in 2006 is that the SEIU came in and organized people. That factor was absent in 2001, ditto 2002, 2003, 2004, 2005. Under the circumstances, it would be irrational for either the SEIU or the workers who support them to give up their drive for a union, as it is now painfully clear that it is only through collective action — headline-grabbing collective action — that they achieve anything.

And the fundamental impasse on the issue of how the workers’ sentiments should be measured (card or ballot) remains unresolved.